British financial services consulting market set to struggle this year
Consulting for the global financial services sector is expected to rebound this year, but the UK is expected to remain in the red for 2024.
According to a new report by Source Global Research, consulting into the global financial services sector is expected to rebound, with growth in revenues forecast to almost double from 2.6 per cent in 2023 to five per cent in 2024, and to surpass $80bn (£60bn) for the first time.
The data shows that only one per cent of companies surveyed said they were planning to reduce their reliance on external help, while 60 per cent said that they were looking to increase it, a jump from 2023, when 37 per cent said they planned to use more consulting.
External advice on operations is set for the fastest growth in 2024, seven per cent, but cybersecurity, 11 per cent, and strategy, seven per cent, work are set to be the fastest growing services for consulting in 2025.
However, HR, change and people strategy is set to be the only service line to shrink in 2024, minus three per cent, but this is expected to bounce back to three per cent growth in 2025.
Despite most geographical markets set to recover from negative growth, the report suggests that the UK’s financial services consulting market will remain in the red in 2024, contracting by minus two per cent.
While private equity is expected to get a global boost after shrinking to minus 1.4 per cent in 2023, to eight per cent in 2024, and nine per cent in 2025.
Private equity consulting in the UK is expected to contract by minus four per cent in 2024, a huge contrast compared to the US which is set to grow by eight per cent during the same period.
Peter Curry, senior research analyst from Source Global Research noted, “many of the concerns that troubled the sector in 2023 are still present in 2024, but this year, companies who were previously uncertain about their financial position are now beginning to loosen their purse strings to address long-term issues within their businesses.”
It was reported back in March that the UK’s consulting market (overall) grew by 4.7 per cent across 2023 to revenues of £15.2bn, which was down on the 15.6 per cent growth recorded over 2022.
While a separate survey from earlier this year by Management Consultancies Association, stated that the consultancy sector will have single-digit growth this year, as it predicts growth of 9 per cent for 2023.